In a dramatic shift, several of the largest US lenders, including Morgan Stanley, Citigroup, and Goldman Sachs, have exited the Net Zero Banking Alliance (NZBA) in the weeks leading up to President-elect Donald Trump’s second term. These moves reflect growing political scrutiny of climate initiatives and signal a shift in how Wall Street navigates environmental, social, and governance (ESG) commitments.
Major Banks Leave the Net Zero Banking Alliance
Morgan Stanley became the latest to withdraw from the NZBA on Thursday, joining Citigroup, Bank of America, Wells Fargo, and Goldman Sachs. Despite their exits, these banks reaffirmed their dedication to net-zero goals.
“Morgan Stanley’s commitment to net-zero remains unchanged,” the bank said in a statement.
Similarly, Citigroup reiterated its commitment to climate goals:
“We remain committed to reaching net zero and continue to be transparent about our progress.”
Political Pressure and GOP Criticism
The NZBA, formed in 2021 as part of the Glasgow Financial Alliance for Net Zero (GFANZ), initially symbolized Wall Street’s commitment to combating climate change. However, with the GOP set to assume control of Washington, the alliance and similar coalitions have come under fire.
House Judiciary Committee Chair Jim Jordan has criticized financial climate alliances, labeling them a “climate cartel.” Jordan celebrated similar withdrawals from Climate Action 100+ last year, calling them “big wins for freedom and the American economy.”
Changes to Climate Alliances
In response to mounting pressure, GFANZ recently revised its participation requirements, removing the obligation for member firms to adhere to the Paris Climate Agreement’s goals. While this change may encourage broader participation, it has also raised questions about the alliances’ effectiveness in addressing global climate challenges.
During Trump’s 2024 campaign, a spokesperson confirmed plans to pull the US out of the Paris Climate Agreement again, continuing the policies from Trump’s first term.
JPMorgan Chase Remains, For Now
Not all banks have exited the NZBA. JPMorgan Chase, a founding member of GFANZ, remains part of the alliance but declined to comment on its membership.
The wave of bank exits from the NZBA underscores the increasing politicization of climate initiatives in the financial sector. While many institutions maintain their commitment to net-zero goals, the changing political environment and regulatory pressures are forcing a reevaluation of how these goals are pursued. As the Trump administration takes office, the future of ESG initiatives and global climate alliances remains uncertain.
